Eli Lilly vs. Novo Nordisk: Which Stock Is the Winner of the Weight-Loss Drug Boom?
The global weight-loss drug market is experiencing exceptional growth, projected to expand from around $144.6 billion in 2023 to an estimated $381.5 billion by 2033. Two pharmaceutical giants, Eli Lilly (LLY) and Novo Nordisk (NVO), dominate this market. Both companies have created GLP-1 receptor agonists that have transformed obesity treatment: Eli Lilly's Mounjaro (tirzepatide) and Zepbound, and Novo Nordisk's Ozempic and Wegovy (semaglutide). Let's see which company is ahead of the game and has the best investment case right now.
The Case for Eli Lilly Stock
Valued at $684 billion, Eli Lilly has been a standout performer in the global pharmaceutical industry. Aside from its obesity treatments, it is well-known for developing groundbreaking treatments for autoimmune diseases, cancer, diabetes, Alzheimer's, and other conditions. LLY stock has fallen 6.4% year-to-date, compared to the S&P 500 Index's ($SPX) gain of 0.1%.
Recently, Eli Lilly announced that Zepbound has demonstrated superior efficacy in weight loss compared to Novo Nordisk's Wegovy. The SURMOUNT-5 trial found that participants on Zepbound lost more body weight and waist circumference over 18 months than those on Wegovy. This superior efficacy is due to tirzepatide's dual action as a GLP-1 and GIP agonist, which boosts weight-loss effects.
Financially, Eli Lilly reported a 45% increase in revenue in the first quarter of 2025, reaching $12.73 billion, thanks to strong sales from Mounjaro and Zepbound. Adjusted earnings increased 29% to $3.34 per share during the quarter. Mounjaro, in particular, saw a 113% year-over-year sales increase to $3.8 billion worldwide. Zepbound's sales increased threefold from the same quarter last year.
Aside from the success of its weight-loss drugs, the company's non-incretin portfolio includes successful oncology, neuroscience, and immunology drugs, which are driving growth. The company anticipates 2025 revenue to be in the range of $58 billion to $61 billion, representing year-over-year growth of 28% to 35%.
Eli Lilly has taken proactive measures to capitalize on the weight-loss drug boom. The company has handled supply chain issues more effectively than Novo Nordisk, resulting in improved product availability. Last year, the company launched Mounjaro in all major European markets and provided early stage access in China. In order to increase accessibility, the company has formed partnerships with telehealth providers and launched direct-to-consumer initiatives.
Furthermore, Lilly's investment in orforglipron, an oral GLP-1 receptor agonist, has yielded encouraging results in Phase 3 studies. Patients lost significant weight, and the convenience of a pill form could transform obesity treatment, making it more accessible and appealing to a larger patient base.
On Wall Street, Eli Lilly has earned an overall ' Strong Buy ' rating. Of the 25 analysts who cover the stock, 20 rate it a 'Strong Buy,' two a 'Moderate Buy,' and three recommend a 'Hold.' The average analyst price target of $991.46 suggests a 34.7% increase from current levels. Furthermore, the Street-high estimate of $1,190 implies that the stock could rally by up to 62% over the next year.
The Case for Novo Nordisk Stock
Valued at $311.7 billion, Novo Nordisk is a Denmark-based pharmaceutical company specializing primarily in diabetes care, obesity treatment, and other chronic disease therapies. Novo Nordisk's Ozempic and Wegovy have been instrumental in the company's growth. However, Eli Lilly's weight loss drugs have demonstrated superior efficacy, challenging Novo Nordisk's market dominance. Novo's stock has fallen nearly 20% year to date, compared to the overall market.
In the first quarter of 2025, Novo Nordisk reported earnings per share of 6.53 DKK, in line with analyst expectations. Sales rose 18% year on year to 78.08 billion DKK, led by a 15% rise in Ozempic sales and an 83% increase in Wegovy sales. Despite these gains, the company faces significant challenges due to increased competition and shifting market dynamics. As a result, Novo Nordisk lowered its full-year guidance, projecting 2025 sales growth of 13% to 21%, significantly lower than Lilly's projections. Analysts who cover the stock expect Novo's revenue to grow by 25.5%, followed by earnings growth of 26%.
While Eli Lilly's drugs have demonstrated superior efficacy, according to Leerink Partners analyst David Risinger, most people are unaware that Zepbound outperforms Wegovy. As a result, Novo continues to hold 65% of the market, while Lilly holds 34%. However, this may soon change.
On Wall Street, Novo Nordisk stock has earned an overall ' Moderate Buy ' rating. Of the 18 analysts who cover the stock, eight rate it a 'Strong Buy,' seven say it is a 'Hold,' one says it is a 'Moderate Sell,' and two suggest a 'Strong Sell.' The average analyst price target of $101.93 suggests a 44% increase from current levels. Furthermore, the Street-high estimate of $160 implies that the stock could rally by up to 128% over the next year.
The Verdict: Eli Lilly Takes the Lead
Both Eli Lilly and Novo Nordisk continue to strengthen their incretin portfolios. However, based on clinical efficacy, market performance, strategic initiatives, and leadership stability, Eli Lilly currently has a competitive advantage over Novo Nordisk in the weight-loss drug market. Overall, Eli Lilly stock represents a better long-term investment.
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